News

Medicaid Disenrollments Exceed HHS Predictions

• When states began coverage redeterminations on April 1, 2023, HHS projected 15 million beneficiaries would lose coverage. However, as of March 20, 2024, more than 18 million individuals have been disenrolled, far exceeding predictions. Additionally, 35 million beneficiaries’ eligibility redeterminations have either not been completed or have not been reported. Disenrollment numbers have varied across states with Texas disenrolling the most Medicaid beneficiaries so far at 2 million, and Wyoming the fewest at 5,300 beneficiaries. The majority of disenrollments were due to beneficiaries not completing the required renewal process in order to maintain coverage. Most individuals who have lost eligibility are now eligible for an employer-sponsored health plan. Those moving to a marketplace plan can enroll before July 31, 2024, as part of an extended unwinding special enrollment period (Health Payer Intelligence, March 25).

CMS Approves Medicare Part D to Cover Weight Loss Drug

• On March 21, CMS announced that Medicare Part D plans may cover Wegovy, the weight loss drug, when it is prescribed for the prevention of heart attacks, strokes, and other cardiovascular conditions. CMS made the distinction that they will not cover Wegovy solely for weight management but for individuals who have comorbidities of being overweight and having heart disease. This announcement comes two weeks after the FDA approved the use of Wegovy to reduce the risk of heart attack and stroke in obese or overweight adults with a history of cardiovascular disease (McKnights, March 25).

Federal Legislation

Minibus Bill Prevents Government Shutdown, Funds HHS and Healthcare Workforce

• On March 23, President Biden signed a $1.2 trillion spending package to cover federal government operations through September 30, 2024. This averts a partial government shutdown and provides funding for about three-quarters of federal government agency operations, including the Departments of Labor, Health and Human Services, and Education for the next six months. The spending bill allocated $117 billion for HHS, approximately a 1% increase over FY 2023. Policies around pharmacy benefit managers, price transparency, and site-neutral payments were not included in the spending package. According to the American Hospital Association, around $14 million will fund an assortment of healthcare workforce programs such as the National Health Service Corps, nursing programs, and Children’s Hospitals Graduate Medical Education (Becker’s Healthcare, March 25; Inside Health Policy, March 22).

CMS to Pilot New Payment Model for Primary Care Starting January 1, 2025

• On March 19, CMS released the details of a new model that would provide primary care-focused Accountable Care Organizations (ACOs) with both a one-time Advanced Shared Savings payment and monthly prospective, population-based payments, Prospective Primary Care Payments. The ACO Primary Care (PC) Flex Model will function within the Medicare Shared Savings Program, and ACOs that partake will jointly participate in both programs concurrently. The innovative model aims to ease financial burden for low revenue ACOs while encouraging primary care providers within them to apply a team-based, person-centered approach to care that impacts health outcomes, quality measures, and cost of care in a positive way. A total of 130 ACOs will be selected by CMS to participate in the ACO PC Flex Model starting January 1, 2025. To be eligible, ACOs must participate in the Shared Savings Program, be low revenue ACOs (as defined under 42 CFR § 425.20), and meet the ACO PC Flex Model eligibility requirements that will be outlined in the upcoming Request for Applications (RFA) (CMS, March 19; Modern Healthcare, March 20).

45 Million Individuals Covered by a Private Plan or Medicaid Because of Medicaid Expansion and the Affordable Care Act Exchanges

• According to the Health Insurance Marketplaces 2024 Open Enrollment Report released by CMS on March 22, 45 million individuals are covered by a private insurance plan or Medicaid because of the ACA exchanges and Medicaid expansion. The report features enrollment trends and how the ACA exchanges have progressed since they were originally rolled out in 2013. Highlights of the enrollment report include the following:
  • 4 million individuals selected or were auto-enrolled in an ACA plan through healthcare.gov or a state-run exchange, which is a 31% increase compared to 2023.
  • The number of new consumers on the exchanges increased by 41% from 2023.
  • 6 million more individuals are receiving ACA tax credits compared to 2023, which includes 1.5 million individuals earning more than 400% FPL who would be ineligible for assistance without the ACA enhanced subsidies.
  • Average monthly premiums when including the tax subsidies decreased by 32% from $164 in 2023 to $111 in 2024 (Inside Health Policy, March 25; CMS, March 22).

Federal Regulation/Guidance

CMS to Release New Unwinding Timeline for States

• CMS is set to release an updated unwinding timeline within the next few weeks, informing states of when they will be required to complete Medicaid redeterminations. Experts believe that the document will include information regarding the ex-parte glitch caused by faulty programming, and other possible renewal process issues that may come up. In September 2023, approximately 30 states informed CMS about the numerous renewal issues they encountered. While many experts think this problem could force states to extend unwinding through 2025, Medicaid managed care executives believe most states will complete the unwinding process by mid-2024 (Inside Health Policy, March 22).